THIS WEEK:

Climate Change Change? An article on Roger Pielke Sr’s web site states that the draft Summary for Policymakers by UN Intergovernmental Panel on Climate Change (IPCC) has a new definition of climate change. “Climate change may be due to natural internal processes or external forcings, or to persistent anthropogenic changes in the composition of the atmosphere or in land use.” The past definition emphasized human caused changes, particularly activities that alter the composition of the atmosphere.

Does this mean a greater recognition of human influences that are unrelated to the atmosphere (carbon dioxide (CO2)) emissions? Recognition of natural causes, instead efforts to dismiss them? At this time one cannot know what will come out in the final reports. Recently, discussion of the Medieval Warm Period and the Little Ice Age has become more prevalent in the literature after being suppressed by the third IPCC Assessment Report in 2001 with its notorious “hockey-stick.” If natural causes become part of the open discussion, it will be interesting to see how government agencies such as the US EPA will handle the possibility that their pronouncements of the science being certain were, actually, uncertain. Please see link under Challenging the Orthodoxy.

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Further Challenges: A study published in Nature challenges the assumption that moist soils promote afternoon rains over these areas. Instead, it suggests that the rain generally falls on dryer soils. If this conclusion is thoroughly tested and confirmed, than climate models need to be reworked and many conclusions need to be reexamined.

Physicist Donald Rapp reviews a book by Bob Tisdale, essentially self-published, which Rapp finds to be extraordinary. According to Rapp, the book gives a detailed description of El Niño Southern Oscillation (ENSO) events, with particular emphasis on the last 30 years. Among key points are that the atmosphere does not warm oceans, sunlight warms oceans, and that the recent global warming is largely explained by warm surface waters during and after El Niños. These assertions are food for thought. Please links under Challenging the Orthodoxy.

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Breakfast with James Hansen: The public relations agent for James Hansen requested that Hansen be given an opportunity to address Americans for Tax Reform (ATR). ATR used the request to arrange a breakfast meeting with Hansen and some global warming skeptics or doubters of Hansen’s theories.

Hansen’s goal was to provide scientific support for his latest proposal of a carbon dioxide tax starting at $15 per ton and increasing by $10 per ton for ten years to a total of $115 per ton. All the tax revenues would be immediately distributed to the households of the nation. Ivory tower economics at its most ideal!

To justify the tax, Hansen used his latest research published in the Proceedings of the National Academy of Science, which has been the subject of comment in TWTW for several weeks. Among other issues, Hansen does not demonstrate a scientific basis for declaring extreme weather events will become more frequent and more dire in the future. He used this year’s drought in the Great Plains as an example. But, it was modest compared to the years of drought in the 1930s when the much of the Great Plains was called the Dust Bowl. Hansen’s analysis does not begin until 1950, avoiding this fact.

The respectively conducted question and answer was more illuminating of the man, than of the science. Fred Singer pointed out that Hansen’s prediction of sea level rise by 2100 was 6 meters (almost 20 feet) and far above the greatest amount predicted by the IPCC of 59 cm (23 inches). Singer stated he supports the low end of the IPCC prediction of 18 to 20 cm (7 to 8 inches) and suggested that Hansen is a contrarian with respect to the IPCC reports. Hansen responded only with wiry simile.

Patrick Michaels produced a graph showing Hansen’s predictions of temperatures during his famous global warming hearing in 1988 and the latest NASA-GISS published temperatures. Hansen’s predictions were far higher than the actual trend. Hansen accused Michaels of manipulating the data.

When Fred Singer asked Hansen for his best physical evidence that human emissions of carbon dioxide caused the recent warming, Hansen accused Singer and Michaels of obfuscation. Requesting clear physical evidence is obfuscation of empirical science?

Another attendee asked Hansen why he so adamantly opposed the Keystone Pipeline to bring crude oil from Canada to Gulf Coast refineries, as illustrated in the Quote of the Week. Hansen stated that he opposed any non-traditional development of oil and natural gas resources, including hydraulic fracturing for these resources.

Randy Randol, a co-founder of VA-SEEE, asked Hansen what was the end game? After a few prompts, Hansen said an atmosphere in which CO2 concentrations were below 350 parts per million. They are above that now.

When twice asked to compare atmospheric temperature trends with surface temperature trends, Hansen ignored the atmospheric measurements. When Ken Haapala pushed on the significant differences in patterns between the Northern Hemisphere and Southern Hemisphere as shown in the atmospheric measurements with the warming trends concentrated in the northern part of the Northern Hemisphere, Hansen remarked that the oceans were hiding the warming of the Southern Hemisphere. The greenhouse effect takes place in the atmosphere, yet somehow it gets into the deep oceans without a trace? [Note the contrast to occasional El Niños causing a warming of the atmosphere as discussed Bob Tisdale’s book reviewed above.]

It is particularly striking that the head of NASA’s Goddard Institute for Space Studies (GISS) avoids space-age technology when discussing temperature measurements.

As to Jim Hansen’s press relations agent – it is none other than David Fenton of Fenton Communications who created the very successful Alar scare for the Natural Resources Defense Council “Intolerable Risk: Pesticides in Our Children’s Food.” A ripening agent mostly for apples, not a pesticide, Alar had been shown in questionable studies to possibly be linked with cancer or tumors in mice when mice are feed massive doses beyond acceptable scientific limits, and far beyond what humans could consume when eating apples or drinking apple juice. This questionable link did not prevent Fenton from demonizing Alar and terrifying parents, teachers, etc. from serving and eating apples. Apple growers financially suffered, enormously.

Skeptics should be prepared for a media blitz for a carbon tax similar to what happened to the apple growers, who were caught unaware.

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Wind Panic: It appears that Congress will be departing next week to prepare for the elections and leaving a number of issues unresolved, including, for the third year in a row, the Senate has failed to vote on a budget. The Wind Industry is heavily lobbying Congress to extend the Production Tax Credit (PTC), which is scheduled to expire at the end of 2012. Without this subsidy, the Wind Industry is claiming it will virtually vanish and thousands of green jobs will be lost. The subsidies and the number of green jobs have been topics in TWTW in the past few weeks.

The calls that traditional forms of electricity generation are being subsidized are increasingly specious. For example, the Department of Energy grants subsidies for research and development into more efficient and less polluting means of generating electricity. These, perhaps, may be a needed function of government. It is something again to subsidize the actual deployment of a form of electricity generation that is not cost effective – which is exactly what the Production Tax Credit does.

Increasingly, nations and some states that have spent significant monies on wind are finding that early beliefs that increasing use of wind will decrease the need for traditional sources of electricity were wrong. Weather systems are huge, and wind can fail in a vast geographic region, requiring reliable power from traditional sources. Further, wind power often fails at times it is needed the most. As such, wind power is actually a secondary source of electricity, and the traditional sources are primary. The issue is: why build a secondary source of electricity, which cannot deliver when needed the most, unless it reduces overall costs? Wind power does not?

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Race with China? Many promoters of wind and solar power justify subsidies by claiming the West is in a race with China for leadership in 21st century energy. Reports from China on bankruptcies of over-subsidized firms indicate China may be withdrawing from the race. Please see Article # 2.

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Show Me the Data: Space architect Larry Bell wrote an illuminating interview with air and space pioneer Burt Rutan focusing on why Rutan became skeptical of the claims that humans are causing unprecedented and dangerous global warming / climate change. Please see link under Challenging the Orthodoxy.

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Number of the Week: 20 Billion Gallons. According to Donn Dears, the Energy Independence and Security Act (EISA) of 2007 with its Renewable Fuel Standard (RFS) mandate requires that 20 Billion Gallons of Cellulosic Biofuels be mixed into the US liquid fuel supply by 2022. Cellulosic biofuels are experimental, and the only plant that produced them has gone bankrupt. In a state of the union speech, President Bush held out the promise of cellulosic biofuels and Congress, controlled by Democrats, responded. Impractical optimism is bi-partisan. Please see link under Alternative, Green (“Clean”) Energy – Other.

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ARTICLES:

For the numbered articles below please see this week’s TWTW at: http://www.sepp.org. The articles are at the end of the pdf.

[SEPP Comment: Responding to Pielke’s challenge on unsubstantiated claims of disaster trends, the IPCC invited specific comments. When Pielke supplied them, it responded using the best Bureaucratic Science.]

[SEPP Comment: The predictions of the weather models are repeatedly tested, and re-tested. All this is publically known. Weathermen know that models have significant weaknesses and which must be adjusted if they repeatedly fail tests. Climate modelers ignore such tests.]

[SEPP Comment: An amusing twist on EPA arguments of benefits from increased fuel economy standards. For each barrel of crude oil the US does not import, EPA calculates benefits of $13.42. Therefore, should not one also calculate that each barrel of domestic production yields $13.42 in additional benefits?]

[SEPP Comment: Early in the spill TWTW speculated that microbs in the Gulf were enjoying a feast. Natural gas and oil seeps have been recorded before ships began to use oil and long before drilling for oil started in the Gulf.]

[SEPP Comment: Could marginal cost pricing save it? The sunk costs of the development and tooling are written off and vehicles are priced based on the costs of manufacturing, distribution, etc. The screams in Washington would be amusing.]

As America pays tribute to Neil Armstrong in a memorial service Thursday at the National Cathedral in Washington, I would like to reflect on the life and legacy of this great space-exploration pioneer.

The memorial service, I note, falls one day after the 50th anniversary of President Kennedy’s “moon speech” at Rice University in Houston, a speech that fired the nation’s imagination and energies to undertake “the most hazardous and dangerous and greatest adventure on which man has ever embarked.”

I was deeply saddened to learn of Neil’s passing—my good friend and Apollo 11 crewmate along with Michael Collins. It never occurred to me that our mission commander might be the first of us to pass.

Thinking about Neil, I was reminded of the statement attributed to Sir Isaac Newton in the 17th century, when he attempted to explain how he was able to develop a powerful understanding of physics and mathematics: “If I have seen further, it is because I have stood on the shoulders of giants.”

For the Apollo program, Neil was that giant. He was the consummate test pilot and astronaut whose skills were demonstrated repeatedly throughout his career, whether expanding the envelope of the X-15 space plane to the very edge of space (207,500 feet) at nearly 4,000 mph; gaining control of his spinning spacecraft during Gemini 8 in 1966 and guiding it safely back to Earth; ejecting at the last possible moment before the Lunar Lander Training Vehicle crashed, then quietly returning to his office to analyze the cause of the malfunction and file a mishap report; or, most especially, skillfully guiding the Apollo 11 Lunar Module Eagle to a safe landing in a boulder-strewn lunar expanse.

I still vividly recall standing with Neil on the barren, desolate, yet beautiful surface of the moon, looking at the small, brilliant-blue planet Earth, suspended in the blackness of space, while Mike orbited above us awaiting our return, as virtually the entire world took that journey with us.

Neil did not see Apollo 11 as an ending—rather, he regarded the moon landing as a first small step for humankind into the cosmos. If Neil was an extraordinary engineer, astronaut and leader, he was also soft-spoken and reserved, preferring to advocate quietly for space exploration from behind the scenes. He didn’t seek fame or praise for the work that he knew countless others had done to make the moon landing possible.

The last time Neil and I met at the White House, which we did periodically to boost the space policy with a succession of presidents, we talked about where the next step into the future should lie: to the moon or Mars? I said Mars. Neil said: “No!” He thought that we had much to learn from the moon before moving on to other challenges. But in the end, while we differed at times on where next to go and how best to get there, we always shared a common belief that America must lead in space.

As we contemplate his passing, let us also pause to remember those who gave their lives in pursuit of achieving the dream of space exploration: the crews of Apollo 1, Challenger and Columbia. We can honor them all, and the president who first set the moon-landing challenge before the nation, by renewing our dedication to space exploration—and resolving to pursue it with the same determination and enduring commitment to excellence personified by Neil Armstrong.

Dr. Aldrin, an astronaut on Apollo 11 and Gemini 12, is the CEO of Buzz Aldrin Enterprises.

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2. China’s Solyndra Economy

Government subsidies to green energy and high-speed rail have led to mounting losses and costly bailouts. This is not a road the U.S. should travel.

On Aug. 3, the owner of Chengxing Solar Company leapt from the sixth floor of his office building in Jinhua, China. Li Fei killed himself after his company was unable to repay a $3 million bank loan it had guaranteed for another Chinese solar company that defaulted. One local financial newspaper called Li’s suicide “a sign of the imminent collapse facing the Chinese photovoltaic industry” due to overcapacity and mounting debts.

President Barack Obama has held up China’s investments in green energy and high-speed rail as examples of the kind of state-led industrial policy that America should be emulating. The real lesson is precisely the opposite. State subsidies have spawned dozens of Chinese Solyndras that are now on the verge of collapse.

Unveiled in 2010, Beijing’s 12th Five-Year Plan identified solar and wind power and electric automobiles as “strategic emerging industries” that would receive substantial state support. Investors piled into the favored sectors, confident the government’s backing would guarantee success. Barely two years later, all three industries are in dire straits.

This summer, the NYSE-listed LDK Solar, the world’s second largest polysilicon solar wafer producer, defaulted on $95 million owed to over 20 suppliers. The company lost $589 million in the fourth quarter of 2011 and another $185 million in the first quarter of 2012, and has shed nearly 10,000 jobs. The government in LDK’s home province of Jiangxi scrambled to pledge $315 million in public bailout funds, terrified that any further defaults could pull down hundreds of local companies.

Chinese solar companies blame many of their woes on the antidumping tariffs recently imposed by the U.S. and Europe. The real problem, however, is rampant overinvestment driven largely by subsidies. Since 2010, the price of polysilicon wafers used to make solar cells has dropped 73%, according to Maxim Group, while the price of solar cells has fallen 68% and the price of solar modules 57%. At these prices, even low-cost Chinese producers are finding it impossible to break even.

Wind power is seeing similar overcapacity. China’s top wind turbine manufacturers, Goldwind and Sinovel, saw their earnings plummet by 83% and 96% respectively in the first half of 2012, year-on-year. Domestic wind farm operators Huaneng and Datang saw profits plunge 63% and 76%, respectively, due to low capacity utilization. China’s national electricity regulator, SERC, reported that 53% of the wind power generated in Inner Mongolia province in the first half of this year was wasted. One analyst told China Securities Journal that “40-50% of wind power projects are left idle,” with many not even connected to the grid.

A few years ago, Shenzhen-based BYD (short for “Build Your Dreams”) was a media darling that brought in Warren Buffett as an investor. It was going to make China the dominant player in electric automobiles. Despite gorging on green energy subsidies, BYD sold barely 8,000 hybrids and 400 fully electric cars last year, while hemorrhaging cash on an ill-fated solar venture. Company profits for the first half of 2012 plunged 94% year-on-year.

China’s high-speed rail ambitions put the Ministry of Railways so deeply in debt that by the end of last year it was forced to halt all construction and ask Beijing for a $126 billion bailout. Central authorities agreed to give it $31.5 billion to pay its state-owned suppliers and avoid an outright default, and had to issue a blanket guarantee on its bonds to help it raise more. While a handful of high-traffic lines, such as the Shanghai-Beijing route, have some prospect of breaking even, Prof. Zhao Jian of Beijing Jiaotong University compared the rest of the network to “a 160-story luxury hotel where only 11 stories are used and the occupancy rate of those floors is below 50%.”

China’s Railway Ministry racked up $1.4 billion in losses for the first six months of this year, and an internal audit has uncovered dangerous defects due to lax construction on 12 new lines, which will have to be repaired at the cost of billions more. Minister Liu Zhijun, the architect of China’s high-speed rail system, was fired in February 2011 and will soon be prosecuted on corruption charges that reportedly include embezzling some $120 million. One of his lieutenants, the deputy chief engineer, is alleged to have funneled $2.8 billion into an offshore bank account.

Many in Washington have developed a serious case of China-envy, seeing it as an exemplar of how to run an economy. In fact, Beijing’s mandarins are no better at picking winners, and just as prone to blow money on boondoggles, as their Beltway counterparts.

In his State of the Union address earlier this year, President Obama declared, “I will not cede the wind or solar or battery industry to China . . . because we refuse to make the same commitment here.” Given what’s really happening in China, he may want to think again.

Mr. Chovanec is an associate professor of practice at Tsinghua University’s School of Economics and Management in Beijing, China.

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3. Making Sense of the U.S. Oil Boom

Daniel Yergin talks about where it’s coming from and what it will mean for the U.S.—and the world

The U.S. has long been seen as an energy hog. Thanks to hydraulic fracturing and deep water technology, it is now pumping more oil than it has in more than a decade, and its growing status as a crude producer is taking the world by storm.

In a conversation with The Wall Street Journal, Daniel Yergin, the energy industry’s most prominent chronicler, talks about the American oil renaissance and its profound implications for the U.S. in a changing world. Mr. Yergin, currently vice chairman of IHS, a consulting firm in Englewood, Colo., is the author of “The Quest: Energy, Security, and the Remaking of the Modern World.” His history of the oil industry, “The Prize,” earned a Pulitzer Prize.

Here are edited excerpts from the conversation.

WSJ: The U.S. is experiencing an unprecedented boom in oil production. How did this happen? Where is it taking us?

MR. YERGIN: The last time we had a presidential election, the U.S. was going to run out of oil. Since then, U.S. oil production has grown about 25%. As has happened in the past, technology has opened doors people didn’t know were there or didn’t think could be opened.

We expect to see tight-oil production [oil extracted from dense rock formations] grow dramatically over the rest of this decade. If you take what’s happening in the U.S. and what’s happening in Brazil and Canada, we’re going to see a rebalancing of global oil flows. By the end of this decade, the Western Hemisphere may be importing very little oil from the Eastern Hemisphere.

WSJ: What difference does that make to U.S. oil consumers?

MR. YERGIN: Until a couple of years ago, people didn’t focus on the economic impact of domestic energy production. Over one million jobs have been created by the development of unconventional gas. It makes the U.S. more competitive. You can see how the growing recognition of the economic impact is changing the political discourse about energy in the U.S., including, very clearly, in the presidential campaign. You would not have had this kind of discussion about energy in 2008.

[The new flow] changes the geopolitical perspective about energy. The U.S. is going to be relatively more self-sufficient and less dependent on foreign energy. We’re already independent in terms of coal and natural gas; greater reliance on regional and domestic supplies increases our sense of security.

WSJ: Will this weaken the U.S.-Saudi relationship?

MR. YERGIN:We don’t get a lot of our oil from the Middle East as it is today, but the strategic interests are very strong; obviously they’re highlighted by continuing tension over Iran’s nuclear program.

WSJ: What is China’s role after the rebalancing of global oil?

MR. YERGIN: There was much heightened concern about energy security in China in the middle of the last decade; now there’s much more self-confidence in their ability to buy what they need, a bigger appreciation of a flexible global market. But China clearly intends to have a bigger presence on the world stage; it is participating in antipiracy efforts off the coast of Somalia.

In some ways, China will become a partner—it will come to have a role in the security of the flow of energy. This can go on a very constructive, cooperative fashion, or it can go on in a fashion which creates greater risk. This is going to be one of the major focuses of the U.S.-China relationship.

WSJ: Critics have said the potential of unconventional fields—shale and tight oil—is exaggerated. Is this boom real?

MR. YERGIN: The proof is in the numbers. Shale gas (2% of U.S. gas production at the start of the century) is now almost 40% of U.S. gas production. And using this technology in new areas and established oil fields has really revitalized U.S. oil production.

WSJ: Can you put this boom in historical perspective?

MR. YERGIN: During the oil industry’s first century, the U.S. was the world’s dominant oil producer. During World War II, six out of seven barrels of oil used by the Allies came from the U.S. After World War II, the U.S. became a net importer of oil, and it was during the 1970s that it came to be a huge importer.

The last time we had a presidential campaign, the U.S. seemed set to continue along this path. The only question seemed to be: At what pace would imports grow? Since then, we’ve seen a big turnaround—from importing 60% of our crude in 2005 to 42% today. This is a big change, and that number will continue to go down as production increases and we continue to be more efficient in terms of the automobiles that we drive.

The U.S. is not going to go back to its position as the unquestioned major source of world oil. But our production will continue to grow. It is a great turnaround.

WSJ: What sparked it?

MR. YERGIN: The main thing here is the new ability to use in oil fields technologies that were developed for shale gas. It’s technology and entrepreneurship, initiative, people having different ideas and acting on them.

WSJ: Can the U.S. boom be replicated elsewhere?

MR. YERGIN:It’s what happens above ground in terms of policy, fiscal regime, infrastructure, logistics, pipelines. All those things are critical.

Our analysis suggests that China has a bigger unconventional gas potential than the U.S. But the timing will be different. In Argentina, it’s not only the resource. There are very problematic government policies combined with great uncertainty about the fiscal regime and prices. The timing will be controlled not by the physical resource, but by the whole system above ground.

The Russians are very interested in tight oil in western Siberia, which could be a whole new renaissance for that area. But it’s still early days.

Next Challenges

WSJ: What are the big challenges to U.S. development of unconventional energy?

MR. YERGIN: In the mid-Atlantic states there’s still a lot of controversy about shale-gas development. Public acceptability is important. The environmental question needs to be addressed—it will be addressed. There’s a much more intense focus on the water aspect than a few years ago. Also, transportation, pipelines and terminals in North America are struggling to catch up with the new production.

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4. Should the U.S. Export Natural Gas?

Supporters of the idea say it would enhance American sway abroad, but skeptics see economic risks

The U.S. is awash in natural gas—a historic surplus that has driven domestic prices to lows not seen in decades. But amid this sea change, a surprising debate has arisen: Are gas exports bad for the U.S. economy?

Shipping natural gas outside North America can’t occur without a green light from the U.S. Department of Energy, which isn’t expected to weigh in on the issue until after the November elections.

In the meantime, the debate has split into two camps. Supporters see little negative impact and, on the contrary, benefits for U.S. political influence abroad. The other side argues, among other things, that natural-gas exports are likely to give rise to an international cartel similar to OPEC which would compete with U.S. exports and put further pressure on the U.S. economy.

The Wall Street Journal recently sat down with two opponents in the export debate: Leslie Palti-Guzman, an analyst with the global energy and natural-resources consulting group Eurasia Group; and Anne Korin, an adviser to the U.S. Energy Security Council and co-director of the Institute for the Analysis of Global Security, an energy-security think tank.

Leslie Palti-Guzman: ‘The U.S. gas bonanza is giving Washington an opportunity to back away from the Middle East and help key allies.’

MS. PALTI-GUZMAN: There is no question that LNG exports could have numerous economic benefits. It could increase GDP, create jobs, and reverse account deficits as well as reduce international energy prices.

There are also numerous energy-security benefits associated with LNG exports. The U.S. gas bonanza is giving Washington a key geostrategic opportunity to reposition itself in Asia-Pacific, and slowly away from the Middle East, and to help key allies.

MS. KORIN: I don’t support government action to restrict exports of LNG. That said, exporting gas may not be the most economic use of that commodity. Once gas is exported., local excess supply falls and the domestic price of gas begins to rise.

Suppose an American company signs a long-term contract to sell LNG to Japan at $15 per million British thermal units. At that moment, the difference between U.S. and Japanese gas prices will begin to shrink rapidly, with U.S. natural-gas prices rising and Japanese prices falling.

Price Predictions

WSJ: So, Ms. Palti-Guzman, you don’t think that exporting gas will increase prices for U.S. consumers or manufacturers?

MS. PALTI-GUZMAN: Beyond 2015, Henry Hub [U.S. benchmark] prices could experience a lot of volatility and rise to $5 to $6 per million BTUs and above. But current gas prices are down to levels that are unsustainable for producers.

AIGS

Anne Korin: ‘Once gas is exported from the U.S., local excess supply falls and the domestic price of gas begins to rise.’

MS. KORIN: I think it would be imprudent to make price predictions for such a volatile market. Seven years ago we were in a natural-gas crisis and nobody could have predicted prices below $2 per million BTUs. It’s the same situation today, possibly with the reverse trajectory.

WSJ: Is there an amount we could export without hobbling U.S. manufacturers?

MS. PALTI-GUZMAN: The amount of LNG exports allowed will depend on the priority of the next administration—whether it is to reduce the trade imbalance or create jobs, for instance. The most likely scenario is that two or three projects—six billion cubic feet a day—will export U.S. shale-gas-based LNG by 2020. This is not enough to put an end to the economic advantage of U.S. manufacturers.

MS. KORIN: Before rushing to export our gas bonanza, investors ought to compare the economics of exporting natural gas “as is” with those of selling higher-value products made from that gas.

For example, natural gas can be easily converted into the liquid fuel methanol, which can be used in flexible-fuel vehicles [cars and trucks that can use other fuels in addition to gasoline]. At today’s natural-gas prices, methanol costs about 35 cents a gallon to produce. When adjusted for markups, taxes and energy content, it’s significantly less costly than gasoline. Such fuel switching would have a profound impact on our trade deficit, and would be a boon for the natural-gas industry and for the economy.

Global Strategic Effects

WSJ: Ms. Palti-Guzman, you said that exporting gas could be a boon to U.S. foreign policy. How so?

MS. PALTI-GUZMAN: The U.S. has never been closer to energy independence since President Nixon launched in 1975 the concept of energy security through self-sufficiency. Washington has a unique opportunity to become a net exporter of gas and oil products. The U.S. could become by decade’s end the world’s third-largest LNG exporter, after Qatar and Australia.

The U.S. gas bonanza is giving Washington a key geostrategic opportunity to reposition itself in Asia and the Pacific, to slowly back away from the Middle East and help key allies. The U.S. may have a future role to play for governance over natural-gas flow in Asia, especially if it becomes a key LNG exporter.

MS. KORIN: But as LNG plays a larger part in international natural-gas trading and the commodity becomes fungible, the other gas giants—Russia, Iran, Qatar, Saudi Arabia and the United Arab Emirates—will have every incentive to concretize their discussions on forming an OPEC-like natural-gas cartel. They’ll be able to restrict supply to the market and counterbalance the U.S.

That will drive the newly global natural-gas price—and thus prices in the U.S.—higher than it would have gone otherwise. That will certainly benefit those who own and sell the gas, but through higher electricity and chemical prices, it would overall be a drain on the economy.

Mr. Lefebvre is a reporter in Houston for Dow Jones Newswires. He can be reached at ben.lefebvre@dowjones.com.

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5. Seeds of Hope for the Dry Midwest—and the World

Monsanto’s DroughtGard corn and other genetically modified food may also be an environmental boon.

Midwestern corn farmers who have suffered through one of the worst droughts since Dust Bowl days can a least look forward to 2013 in the knowledge that, even if rainfall remains sparse, seeds for a new drought-resistant hybrid corn produced by Monsanto will be available.

But the implications of DroughtGard—and other seeds reducing water use that are sure to follow—extend far beyond the fields of Iowa and Nebraska. As the World Wildlife Fund notes: “Globally, the agricultural sector consumes about 69 percent of the planet’s fresh water—more than twice that of industry (23 percent) and dwarfing municipal uses (8 percent).” The use of fresh water to grow food will only increase as world population increases—from seven billion in 2011 to eight billion by 2025, according to several major international organizations.

Rising world-wide affluence, particularly in countries such as China and India, will place ever greater demands on food production and, in turn, on water resources. These increases will amplify agriculture’s negative impact on the environment.

Better to act now to blunt those effects by learning how to produce food using less water, fewer pesticides, herbicides and synthetic fertilizers. Drought-resistant crops may become a vital tool in achieving those aims.

In rich countries, the current abundance and variety of food at reasonable cost is a direct result of science and technology. For example, tractors and synthetic fertilizers, as well as the knowledge and techniques of hybridization and selective breeding, have transformed the quantity and quality of food. Now biotechnology is answering new challenges in agriculture.

Monsanto’s DroughtGard corn is the latest development in molecular crop science. A gene from the bacterium Bacillis subtilis is inserted in the DNA of corn; the resulting plants tolerate drought more effectively and require less water in nondrought conditions. Anything that reduces the devastation of drought and reduces water consumption in “normal” times warrants attention.

Some critics see little to celebrate about DroughtGard. The Union of Concerned Scientists, for example, has said: “Despite many years of research and millions of dollars in development costs, DroughtGard doesn’t outperform the non-engineered alternatives.” The claim is contentious on many levels but most significantly it misses an important point. DroughtGard is the first step in a new technology that has the potential to benefit the environment and enhance food security.

Almost all new technologies, from Edison’s light bulb to flat-screen televisions, are expensive and immature upon their introduction. To object to a technology from the beginning because it’s expensive and its benefits are marginal over existing technologies is to ignore the history of technology. Unless there are known harms, or unmanageable and intolerable risks, the maturing of the technology through research deserves support.

Technologies, new and old, always involve risks—as do driving a car and walking down stairs. Vigilance is essential. Since the appearance of genetically-modified crops 17 years ago, the results have been encouraging.

The risks that were initially known, and those that have emerged, have been managed well—every bit as well as new technologies in medicine and consumer products. The dire risks of GM crops that many warned about have not materialized.

Inexplicably, unease about genetic modification seems not to apply in medicine, where the practice has a longer history than in agriculture and where its employment is more pervasive and the risks are hardly less substantial. Few want to halt technological advances in medicine, mostly because modern medicine is clearly important to our well-being despite its many flaws.

A reliable supply of affordable food is equally important. Pursuing technologies that enhance food security, while reducing environmental impacts, is in our individual and collective interest.

Mr. Thompson is professor of ecology and evolutionary biology, and the history and philosophy of science at the University of Toronto. His latest book is “Agro-Technology” (Cambridge, 2011). He did some consulting for Monsanto between 2001 and 2004.

From the text “Cellulosic biofuels are experimental, and the only plant that produced them has gone bankrupt.”

This is pedantically true. Range Fuels built a plant with some $300 million of DOE money, and the technology completely failed. But it is misleading. There is another plant being built with some $300 million of private money from Poet/DSM; google Project Liberty. This is not due to go into operation until 2014. If this plant is successful both technically and financially, and I agree that is a mighty big if, but if it is successful then 20 billion gallons of cellulose ethanol per year by 2022 is not out of the question.

“… but if it is successful then 20 billion gallons of cellulose ethanol per year by 2022 is not out of the question.” I will bet a lot of moolah that by 2022, the issue of ethanol will be moot – by then it’s a certainty, in my opinion, that a practical electrical storage device will have long since led to the demise of the ICE powered vehicle. And those still on the road can’t use ethanol. By my crude calculations, 20 billion gallons a year is considerably less than 8% of what we now consume.

The public relations agent for James Hansen requested that Hansen be given an opportunity to address Americans for Tax Reform (ATR). ATR used the request to arrange a breakfast meeting with Hansen and some global warming skeptics or doubters of Hansen’s theories.

Hansen’s goal was to provide scientific support for his latest proposal of a carbon dioxide tax starting at $15 per ton and increasing by $10 per ton for ten years to a total of $115 per ton. All the tax revenues would be immediately distributed to the households of the nation. Ivory tower economics at its most ideal!

Skeptics should be prepared for a media blitz for a carbon tax similar to what happened to the apple growers, who were caught unaware

Hansen has been pushing something like this since at least 2009, though he’s had to increase his bounds – it used to be just coal “death trains,” but between oil sands and frakking, he’s had to add those targets too.

I don’t think it’s going to happen any time soon, at least not with the proceeds going right back to households. If it counts as taxable income, then maybe the government would embrace it.

“As to Jim Hansen’s press relations agent – it is none other than David Fenton of Fenton Communications who created the very successful Alar scare”

Fenton has a nearly half century track record working for The Weathermen, various Communist thug dictators around the world, Abbie Hoffman, moveon.org, and recently brought us the laundering of the Gaza Flotilla a couple of years ago. I’m not surprised in the slightest that Hansen has a marxist as his PR flak.

The IPCC definition of climate change has not changed. Same definition is found in 2001 and 2007 assessment reports and in the 2012 report (Managing the Risks of Extreme Events…). Further, the IPCC definition has always differed from the UNFCCC definition that places emphasis on human-induced climate change. This blurb from SEPP is misleading and should be removed as it is not helpful. Climate realists need to stick to the facts!